French payments systems provider Ingenico plans to integrate New Zealand's Paymark payment network with its recently acquired Bambora business to offer a broader array of services to local retailers and financial institutions.
Paris-based Ingenico will pay $190 million for Paymark, which has more than three-quarters of New Zealand's electronic point of sale terminals, ending a two-year sales process run by owners ANZ Bank New Zealand, ASB Bank, Bank of New Zealand and Westpac New Zealand. As part of the deal, New Zealand's big four banks will keep their existing services agreement with Paymark and Ingenico signalled plans to integrate its old terminal assets with Paymark and Bambora in the broader Pacific region offering POS and terminal management, in-store and online processing capabilities, and analytics and loyalty services.
"Building on the recent acquisition of Bambora, Ingenico will now be able to expand its offering in New Zealand, delivering services and solutions in all areas of payments for small and large businesses and financial institutions alike," Ingenico Pacific region vice president Dominic White said in a statement.
Paymark operates 140,000 terminals across the country, accounting for 75 percent of the country's transactions. In 2016 it processed 1.3 billion transactions worth $60 billion with more than 50 card issuers and acquirers. The company reported a profit of $21 million on revenue of $73.8 million in the year ended March 31, 2017, paying its shareholders a $16 million dividend.
The banks started looking for a buyer of Paymark in February 2016 as payments systems undergo rapid change with the emergence of crypto-currencies such as Bitcoin, online services provided by the likes of Apple, Google and Paypal, and near-field enabling contactless card and mobile device transactions.
In a statement, they said Ingenico will be a good owner, bringing a high degree of technical skill and innovation to an increasingly complex and creative industry.
Ingenico's acquisition is subject to Commerce Commission and Overseas Investment Office approvals, and is expected to be completed in the second quarter of this year. After that, Paymark will be integrated into Ingenico's banks and acquirers business unit.
The Reserve Bank's financial stability report showed retail payments got faster through 2017 due to a new protocol reduce the delay between payment instructions and processing, while banks haven't been allowed to dishonour an electronic card due to insufficient funds since November 2016. Last year's reports also show work by the central bank and Payments NZ found the country's EFTPOS payments system to be very robust with prolonged outages unlikely.
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